Choices play the biggest factor in success in life, financial success or otherwise. It took me a long time to come to that conclusion, but once I started accepting the facts that I could choose how I spend my time, I could choose how hard I work, and I could choose how to react to other people, I was able to take responsibility for my results and change my future by changing my behavior and attitude. For a while I looked for ways to blame the world around me for my life’s circumstances — losing a job, an apartment, and a girlfriend in the span of two months over a decade ago — and it wasn’t until after that time that I better understood the role my choices played in that mess.
I don’t like looking to the past very often, but it’s hard to talk about what you can control through choice without coming back to that pivotal moment in my life. Those experiences led me to become a better person, I believe, and I can look back and blame no one but myself for my negative circumstances. Time and distance always provide new perspectives in self-evaluation. I developed a new attitude, focusing on making the best choices for myself and my future, opening myself up even more to trusting others who I thought shared my goals, ambitions, and passions, and I firmly believe that the decisions I made about how to focus my time and efforts resulted in my success in life so far, however it may be measured and qualified.
This past year wasn’t exactly smooth sailing for me. With every open door, I’ve faced different obstacles that have tested my patience and resolve. For a decade, I made the best decisions I could make and accepted responsibility for the outcomes. If something wasn’t working right, I adjusted my choices. I was is control of my life and my finances, and it started with my acceptance of this philosophy of choice, espoused by the director of the same organization that I parted over a decade ago, and a budding interest in managing my own money inspired by online discussions.
Financial success only comes when accepting that you control your financial condition through the choices one makes when dealing with money. Even if I had not started writing Consumerism Commentary, which eventually turned into a source of revenue (for me as well as for those who worked for me), I would be in a much improved financial situation than I would have been otherwise, due entirely of this shift in approach to my life.
Yet I am still unwilling to accept the idea that we can control everything simply by making the best choices. There are many forces well beyond the control of one individual human being, and many can adversely affect any person’s financial situation. You can choose, however, how to react to uncontrollable events, and in some cases, you can even plan for them in advance.
Acts of nature
Since the beginning of man’s existence and for the foreseeable future, humans cannot control nature. The struggle and fight of man versus nature has given the world exciting literature and entertainment in epic proportions, but watch out for the spoiler: nature always wins. The drama plays out in real life. Tsunamis wipe out entire islands. Hurricanes and flood waters wash away rich cultures, homes of the wealthy and poor alike, and destroy businesses. Tornadoes whisk away young women (and their little dogs, too) to frightening worlds.
Choice still comes into play, though the choices are easier if you start from a better financial position in the first place. We choose to live in regions prone to flooding, hurricanes, earthquakes, tsunamis, or tornadoes, though those with the least wealth often have the least choice for changing their situations. We choose to insure against the problems that might arise from natural disasters, but without means, insurance can be out of reach.
People will continue to rebuild in the same locations even when their homes are destroyed by natural weather disasters. it’s a choice: the quality of life they benefit from outweighs the risk — in their opinion — of the next act of nature. It’s a fine choice to make, but there are consequences. And that doesn’t help those who choose to live in locations where certain acts of nature are unlikely but still deal with them. I think I’m avoiding disastrous earthquakes by living on the East Coast of the United States, but earthquakes are not entirely possible, and I doubt most insurance plans for homeowners in this region even address the problem.
No matter where you live, there are going to be natural threats. Take those into account in your planning and prepare as best you can, and you’ll be in a better position to withstand the financial consequences should those treats become real.
Acts of human violence, maliciousness, and fraud
Not everyone shares the same values. It shouldn’t surprise anyone that some are willing to lie, cheat, steal, and harm others for their own gain, financial or otherwise. Does the threat of an incredibly unlikely attack by terrorists prevent you from traveling? Perhaps sometimes. Despite the harrowing experience of September 11, 2011, I still travel to New York City. I’m not concerned about traveling to London and Paris, also terrorist targets in recent years.
Yet, perhaps a location more foreign to me, I’m concerned about traveling to locations in the Middle East, given that region’s history of violence, despite many stories of people visiting and living their peacefully in contrast the message delivered by news media. Violence comes in less grand forms, however.
Being mugged on the street — violence with at least a little financial consequence — can happen anywhere in the United States, though more likely in urban locations, but I don’t avoid them. I try to make smart decisions. Avoid walking in poorly lit areas, don’t carry a lot of cash or credit cards. That helps minimize the damage.
Maliciousness and fraud may be more difficult to avoid and more of a concern in terms of statistical probability. Bernie Madoff, who we now perceive as being one of the biggest financial fraudsters in recent years, operated in an environment where fraud is common. We wonder how pension fund managers and savvy investors like those working for the New York Mets fell for Madoff’s shenanigans, and we say these investors should have seen the signs had they just asked the right questions, but human nature often prevents good, logical decision making.
The legal system is available for seeking justice, but it can also be a tool for malicious people to destroy the success of others. Making the right decisions isn’t always protection enough; protect your wealth by making sure your agreements are solid and your liability is restricted, but prepare for the possibility of people trying to take advantage when you open yourself to others.
Acts of human accidents
One car accident, if you survive in the first place, can damage your finances forever. While on the one hand, you’re sure to be thankful you’re alive, but you’d be more thankful with health insurance and disability insurance to help you keep any wealth you have accumulated. You can prepare for the financial realities by being properly insured, but there are situations where your condition destroys your plans to build wealth for your family. Life insurance is another option that could help your family when your income stream is disrupted, but these precautions do not cover every possible financial consequence of accidents.
If an accident is due to negligence, there might be an opportunity to recover from a related financial loss by using the civil courts, but that can be an expensive proposition — you’ll often need to be able to afford the best lawyers, particularly if your loss is due to the actions of a much larger entity.
You cannot control what other people do. Everyone is an individual with his or her own brain and own motivations. Yet, the actions other people take, whether maliciously or accidentally, can affect you and your financial situation. And no man has won against nature. So in circumstances like these, where you can’t control your outcome by your choices alone, you have to use your decision-making skills in the areas of reducing the likelihood of occurrence before the fact and reducing your exposure to damaging results after the fact.
- Properly insure yourself without over-insuring or under-insuring. Paying too much for coverage you don’t need prevent some long-term financial growth, but it’s a small price to pay for the results of being under-insured. Make the best choices about insurance coverage, working with companies with good track records in dealing with claims, not just the cheapest providers.
- Arm yourself with people on your side. If you run your own business, you without a doubt need connections to lawyers who can help you with the day-to-day realities of owning a business, but those who can put you in touch with other types of attorneys should the need arise — and in business, dealing with other people, the need will most definitely arise at some point.
- Choose how to react. The effect on your life and your finances in the event of a conflict can be determined by the first choices you make in a stressful situation. Different situations call for different reactions, so it’s hard to generalize. Even in stress, the decisions should always be made with your ultimate goals and values in mind.
Even though there are many things in this world you can’t control, some of which can have an adverse effect on your finances, you can use the choices you make before and after to give you a better chance of financially surviving, and perhaps thriving, external actions.
And remember to be happy you’re alive and have the option to deal with disasters at all.
Published or updated January 3, 2013.